Kentucky Law Journal

Volume 39 Issue 1 Article 4

1950

Slum Clearance and Redevelopment

Carl B. Wachs
Kentucky Municipal League

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Recommended Citation
Wachs, Carl B. (1950) "Slum Clearance and Redevelopment," Kentucky Law Journal: Vol. 39: Iss. 1, Article
4.
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 SLUM CLEARANCE AND REDEVELOPMENT

By CmiL B. WACHs*

With the passage of the National Housing Act of 1949 and House
Bill 444, Kentucky General Assembly, 1950, Kentucky cities will be
able to eliminate their slums and redevelop them to more appropriate
uses, and to provide low cost housing, as a part of a comprehensive
national policy and program for improved housing and slum clear-
ance. Cities have not been able to do much slum clearance and urban
redevelopment because of the high cost of land and the difficulties in
assembling tracts of land of adequate size and in writing down the re-
value of the land for redevelopment for private enterprise or for public
use. In addition, the problem of re-housing families which would be
displaced by the clearance of slums or the construction of public im-
provements has held up many worth while projects.
The Housing Act provides for federal loans and grants to mum-
cipalities to assist them in the planning, assembly, clearance, and re-
value of land for redevelopment purposes by public or private enter-
prise. It will also aid cities in providing new public improvements
which will support the redeveloped uses of slum lands. The Act,
however, requires that the cities make a proportionate contribution to
the cost of redevelopment.
Although there was some legislation on the Kentucky statute
books,' the pre-existing Kentucky law, KRS 99.010 to 99.320 applies
only to cities of the first and second class and allows slum areas to
be redeveloped only by Private Redevelopment Corporations. The
Federal funds were only applicable to Local Public Agencies. There
were many other features of the Kentucky enabling act for develop-
ment which were not compatible with the Federal Housing Act of 1949.
It was therefore thought advisable to write a new law to present to
the 1950 session of the State Legislature in January This was done,
and the new law is now contained in KRS 99.830 to 99.510.
KRS 99.330 deals with existing conditions relative to slum and
blighted areas, their effect on the health and welfare of the commum-
ties, the proposition that benefits would accrue through elimination
of the conditions, and the necessity for legislation on the subject.

* Executive Secretary, Kentucky Municipal League, Lexington, Ky.

'The Federal Housing and Home Finance Agency indicated that this legis-
lation would not enable Kentucky cities to take advantage of Title I of the Federal
Housing Act of 1949.
 SLUM CLEARANCE

Section 99.850 provides for the creation of an agency, five in num-

ber and resident electors of the community, appointed by the mayor
with the approval of the majority of the council. The terms of the
first appointees are one, two, three, four, and five years, respectively,
and thereafter for terms of five years. Selection of a chairman rests
with the members. Actual and necessary expenses are provided but
must be paid from the funds of the community No member of the
agency shall be financially interested in any of its activities, directly
or indirectly The council may appropriate money for the administra-
tive purposes of the agency; reports shall be filed with the council
at such intervals as council may prescribe.
In subsection (10) it is provided that any time after two years
after the appointment of the first five members of the agency, if such
agency shall not theretofore have redeveloped or acquired land, or
commenced redevelopment, the council may be resolution declare
that the offices of the members of the agency shall be vacated, and
their power shall be suspended and shall remain suspended until the
appointment of new members.
Section 99.860 provides that each agency shall constitute a-public
body, corporate and politic, exercise public and essential governmental
functions, and have the following powers in addition to the others
granted: 2
(a) To sue and be sued
(b) To make bylaws, rules and regulations
(c) To select and appoint such officers, agents, counsel
and employes subject, however, to the provision of its budget;
(d) To purchase, lease, obtain option upon, acquire by
gift, grant, bequest, devise or otherwise, any real or personal property,
together with any improvements thereon to sell, lease, exchange,
subdivide, transfer, assign, pledge, encumber or dispose of any real
or personal property or interest therein to insure or provide for
insurance to rent, maintain, manage, operate and repair such
real property;
(e) To borrow and accept loans and grants from the Fed-
eral Government or any agency thereof, or from any sources, public
or private
(f) Within its area of operation, to develop as a building
site or sites, any real property owned or acquired by it
(g) Witln its area of operation, to prepare from time
to time plans for the improvement or rehabilitation of slum and
blighted areas
(h) To invest any funds held in reserve or siking funds
or any funds not required for immediate disbursement
(1) To obligate lessees or purchasers of -land acquired
in a redevelopment project: (1) to use such land for the purpose
designated m the development plan; (2) to begin the' building of
specified improvements within a period of time. and (8) to
comply with such other conditions as in the opimon'-of the agency
are necessary 4-
 KENTUCKY LAW JOURNAL

(j) To exercise all or any part or combination of the

powers herein granted.
Subsection (2) "Nothing contained in this section shall authorize
such agency to construct any of the buildings for residential, commer-
cial, industrial or other use contemplated by the development plan."
Section 99.370 sets out the prerequisites for the adoption of a de-
velopment plan. A master plan of the community must be adopted
by the planning commission of the community The development
plan must be approved by the planning commission and a public hear-
ing must be held by the agency where all persons interested may be
heard. The agency must provide a method for the temporary or per-
manent relocation of families displaced from the development area.
After public hearing, the agency must certify to council an estimate.
of the cost required for the redevelopment.
The council must find that the area is a slum area and a blighted
area, as defined in KRS 99.340; that a shortage of housing exists
in the community; that the demolition of residential units in a slum
area under development plans will increase the need for housing
accommodations; that existing conditions constitute a menace to public
health, safety, and welfare; that development of the area is a part of
an overall program for the elimination of slum areas; that the develop-
ment will provide for an opportunity for private enterprise; that the
development conforms to the general or master plan of the community
as a whole; that federal assistance is necessary to enable the develop-
ment area to redevelop and funds will be available; and that the coun-
cil has approved the development plan.
Section 99.380 deals with the issuance of building permits and cer-
tificates of occupancy in the development areas. It restricts such
permits to those structures or uses that conform to the development
plan.
Section 99.390 provides for appeals from actions of the agency,
to the circuit court. Hearings de novo are held by the judge, and
appeals may be taken to the Court of Appeals.
Section 99.400 provides that any community within the area of
the development may grant funds to the agency, and that to obtain
funds for this purpose the community may levy taxes or may issue and
sell its general obligations or revenue bonds. Sections 99.830 to 99.510
provide the manner and limits of issuing the bonds.
Section 99.410 grants powers to public bodies to aid an agency
as follows:
(a) Dedicate, sell, convey or lease any of its interest in
any property, or grant easements, licenses or any other rights or
pnvileges
 SLUM CLEARHANCE

(b) Cause parks, playgrounds, recreational, community,

educational, water, sewer or drainage facilities to be fur-
nished
(c) Provide streets or ways or other public places
(d) Plan or replan, zone or rezone, or make exceptions
from building regulations
(c) Cause services to be furnished
(f) Enter into agreements relating to the repair,
closing or demolition of unfit or unsafe dwellings;
(g) Incur the entire expenses of any public i-
provement
(h) Do any and all things necessary or convenient to
aid in the redevelopment

There is also a provision that "Any sale, conveyance, lease or agree-

ment provided for in this section may be made by a public body
without appraisal, public notice, advertisement or public bidding."
Section 99.420 provides the proceedings for the exercise of eminent
domain. The proceedings for condemnation shall be in the circuit
court of the county in which the greater part of the property sought
to be condemned lies. After filing the petition, application to the
court may be made to appoint commissioners to assess the damages.
The court shall then appoint three disinterested, impartial house-
keepers of the county who are owners of land. These commissioners
shall view the property and award to the owner the value thereof.
They shall also award to the owner any incidental damages resulting
to Is adjacent lands, considering the purposes for which it is taken,
but they shall deduct from the damages the value of any advantages
and benefits that will accrue to such adjacent lands from the proper use
of. the property After the commissioners have filed their report the
judge shall by interlocutory judgment grant to the community imme-
diate possession and full use and control of sai4 land, provided the
community shall have paid into court the sum required by the com-
missioners in their report. The court shall cause a deed of conveyance
of the land to be executed and delivered to the community
After the commissioners report is made, either party may file
written exceptions to the report, except that the community s excep-
tions, if any, shall be made and filed prior to the entry of the inter-
locutory judgment. If exceptions are based on the ground that the
damage awarded is too small or too great, the differences shall be
deemed the amount in controversy for the purposes of appeal. The
court may require the parties to plead to an issue of fact, and shall
require the community to execute a bond conditioned upon the com-
munity paying the parties the difference between the sum paid into
court and that which thereafter may be finally determined to be the
 KENTUcKiY LAW JouNAL

value of the property When all parties are ready the court shall
cause the case to be docketed for trial by a jury as other common law
cases are tried. In assessing damages the jury shall be governed by the
same rules prescribed for the commissioners in making the report, and
the court shall so instruct the jury
An appeal may be taken by either party to the Court of Appeals,
but no appeal or supersedeas shall suspend the right of the community
to have possession of the property, easement, or right of way con-
denuid.
Section 99.430 grants the power to issue revenue bonds by the
agency and to issue refunding bonds. The principal and interest may
be paid exclusively from the revenues of the redevelopment project,
or from that income plus grants and contributions from the federal
government or other sources. The bonds may be additionally secured
by mortgage, deed of trust or other lien on the property in the re-
development project. Members of the agency are relieved from any
liability personally on the bonds, and it is declared that the bonds
shall not be a debt of the State, county, city or other political sub-
division. The bonds may be sold at not less than par, and shall be
exempt from all taxes.
The agency is given a number of specific powers with respect to
the terms of the bonds and a general power to do any and all things
-necessary or desirable to secure them or make them more marketable.
All public officers, public bodies, banks, building and loan associa-
tions, insurance companies, administrators, guardians, trustees and
other fiduciaries may legally invest any sinking funds, moneys, or other
funds in any bonds issued by the agency; and such bonds and other
obligations shall be authorized security for all public deposits.
Section 99.440 provides that work shall commence within two years
after the approval of the council or the certification of the vote of any
bond issue submitted to the voters.
Section 99.450 provides for the disposal of the property of the
development area. The agency may sell, exchange, lease or otherwise
transfer the property acquired under the provisions of this section to
one or more private individuals or to public bodies, and thereafter
the real property shall be used only with the limitations set forth in
the development plan. Maximum opportunity, consistent with the
sound needs of the locality, shall be given private enterprise in the
redevelopment of the development area. The agency shall sell all of
the property in such development area as soon as feasible in the pub-
lic interest.
Section 99A60 provides the method of modifying the plan.
 SLUM CLEARANCE 27

Section 99.470 provides for temporary leasing during development,

and at the same time provides that no leases shall be made for a term
longer than three years.
Section 99.480 provides that the agency shall make the schedule
of prevailing wages a part of the specifications for the contract for
work on the development and shall conform to all requirements of
KRS 387.510 to 337.540, inclusive.
Section 99.490 provides that the exercise of the agency s powers
may be vested in the local housing commission. That may be done
by the council.
The closing Section 99.500 provides that two or more communities
may jointly exercise the powers granted, and in such case the plan-
ning commissions, councils and agencies may hold joint meetings.
This act challenges public officials and private citizens to accom-
plish the clearance and redevelopment of slums in our cities and to
create additional, better, and more economical housing.